Last week the US Department of Justice (DOJ) trumpeted a settlement with six firms over recruiting practices, which had been under investigation as anti-competitive. The firms involved are Apple, Google, Intel, Adobe, Intuit and Pixar. The claim was that they agreed not to “poach” employees from one another, allegedly to depress wages:

The department said that the agreements eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities . . .

According to the complaint, the six companies entered into agreements that restrained competition between them for highly skilled employees. The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees. An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees.

The named companies admitted no wrongdoing as part of the settlement, which would be in effect (if accepted by the court) for five years and prevent these companies from restricting recruitment in any fashion.

In order to maintain a good working relationship with these companies, in 2005 we decided not to “cold call” employees at a few of our partner companies. Our policy only impacted cold calling, and we continued to recruit from these companies through LinkedIn, job fairs, employee referrals, or when candidates approached Google directly. In fact, we hired hundreds of employees from the companies involved during this time period.

We don’t know whether this is a good or bad settlement, but neither does the Division, because it didn’t look at the economic consequences of the do-not-cold-call agreements or of the settlement on wages or on competition. Instead of looking at the evidence, which the Division would have done had it evaluated the case under a “rule of reason,” the Division viewed these agreements are per se violations of the antitrust laws.

The DOJ has again made the world safe for cold-calling; let it begin anew.

About The Author

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.